Allbirds, the struggling footwear company that has seen its stock price slide by about 50% over the past year, announced a dramatic shift in its business today centered around AI and GPUs. The company’s share value jumped by more than 100% after Allbirds made the announcement today.
As part of the plan, Allbirds has sold its Allbirds brand and footwear assets to American Exchange Group, while the previous iteration of Allbirds–going forward to be known as NewBird AI–will “pivot its business to AI compute infrastructure.” The company said its long-term vision is to become a “fully integrated GPU-as-a-service and AI-native cloud solutions provider.”
What makes a former shoe company believe it can compete in the AI space? That isn’t clear, but the company has secured millions of dollars in funding to help make it happen.
NewBird AI will use a $50 million convertible financing facility agreement to buy “high-performance GPU assets” and then deploy them to serve customers looking for AI compute capacity.
“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” NewBird AI said.
The company said it sees a future here because companies around the world are spending more and more money on AI services and data centers. People and companies cannot get the AI compute resources they need, and NewBird AI says it will try to make those people its customers.
AllBirds–an eco-friendly shoe company known for using what the company said was responsibly sourced Merino wool–was once valued at $4 billion. The company had a massive drawdown and sold earlier this year to American Exchange Group for $39 million.
GPUs and AI have been much-discussed in the technology and video game spaces in recent times, with the demand for chips and memory causing headaches for many consumers and driving up the prices of all manner of things, including gaming consoles and PCs, including the new Steam Machines.
Beyond the annoyance of paying more, the AI craze has experts believing AI may be a bubble that’s about to pop. Others think that is not the case. Nvidia has ridden the wave of demand for AI and has become the world’s most valuable company by market cap as a result.
Many other companies are heavily invested in AI as well, including Microsoft, which is spending billions on its AI build-out. The new CEO of Microsoft Gaming, Asha Sharma, comes from Microsoft’s AI team, but has promised “no soulless AI slop.” There also continue to be fears that advancements to AI could lead to job losses.